Aviation Intelligence Reporter May 2021
A Humbler, Gentler IATA?
Carbon Pricing: Keeping the Externalities External
Vaccine Passports, Borders and Summer: A Study in Optimism
Regional Airports: European Issues
State Aid: We No Longer Even Pretend There are Rules
The ECJ and Passenger Rights: Righting the Ledger
What the ANSPs Did Next
To read the full report please login first.
Do you want to become a member?
A Humbler, Gentler IATA?
Willie Walsh has now been IATA’s DG for a month. From the outside there is not much
to report. The images and the communications are much the same, as are the demands. Everybody and every government must do whatever IATA wants. Covid certificates; slot preservation; more funding for SAF: business as usual. But for the staff, there are some interesting hints starting to emerge. First, Walsh has held a staff meeting which notwithstanding Geneva’s work from home directive, was attended by many staff, excited to see the new man in the flesh. Sadly, the excitement led to the meeting becoming a Covid super-spreader event. But what Walsh said is also going viral. Half the staff are mortified, half are breathing again for the first time in a long time.
Carbon Pricing: Keeping the Externalities External
President Biden conducted a virtual Leaders’ Summit on Climate at the end of April. The bad news for the airline industry came on many levels. First, of course, was the ‘virtual’ bit; once, world leaders and their entourages would have come together for the backslapping and flesh-pressing. Now; not so much. Secondly were the commitments, both at the summit, sorry Summit, and beforehand as leaders rushed to finish their homework before standing before the teacher on a virtual screen for the world to see.
Vaccine Passports, Borders and Summer: A Study in Optimism
The grim pictures coming out of India are a stark reminder that unless we get Covid under control, we will continue to be in this half-life. The pictures coming out of Melbourne, with 80,000 maskless people at a football match show that life can recover. It is clear which of these two images the industry wants to focus on, but we must never take our eyes off the one we least want to watch. We may all be epidemiologists now, but some are more epidemiologists than others. It would serve us well to pay attention to what the professionals are saying.
Regional Airports: European Issues
No European airport can be said to be having a good pandemic, but regional airports are suffering more than most. What can the future hold for them? If the European Committee of the Regions is to be believed, the answer is a lifetime supply of state money for each and all of them, whether they are a vital cog in a community or a dream child of a mayor with an edifice complex. Presenting his draft report on regional airports,the rapporteur, Wladyslaw Ortyl a Polish member of the right-wing block in the European Parliament and president of the Podkarpackie region made himself clear. The importance of regional airports cannot be overstated, as European citizens rely on regional airports for a plethora of reasons, ranging from employment and their livelihood to connectivity to other regions. More importantly, he said, regional airports are vital to territorial and economic cohesion. That is a lot of lifting for the regional airports.
State Aid: We No Longer Even Pretend There are Rules
Once upon a time, working in the European Commission was seen as an honourable life choice. Commission staff had a reputation for probity and rigour. And amongst the Directorates-General, DG COMP was seen as the top dog. Europe’s Team Elliot Ness. Fearless trustbusters, truth-seekers and upholders of the European Way, DG COMP was unafraid of suing Amazon and Google, happy to demand divestiture and change, keen to set new rules. Now, DG COMP is a one colour traffic light. Not so much an obstacle course that those seeking to distort markets must navigate, more a rubber stamp. The only risk applicants now face is ink poisoning from the approval stamp.
The ECJ and Passenger Rights: Righting the Ledger
For many years the European Court of Justice and the airlines have had what can only be described as diametrically opposite views on the topic of passenger rights, as enshrined in Regulation 261/2004. Maybe it is the move towards allowing unlimited state aid (see above) that has made the penny drop that airlines are not really bottomless money bags at the moment, maybe the court has changed bottled water suppliers, but whatever the cause, we might be seeing a move back towards sensible rulings from the court with a decision that a diversion does not of itself ground a right to flat-rate compensation. This is a considerable change from their honours.
What the ANSPs Did Next
It is no mystery that the ANSPs are truly struggling at the moment. They have little revenue and huge costs. There is new technology in the offing that will cost money that they currently do not have and to be polite about it, their airline customers will be on the prowl for any and all ‘value for money’ opportunities that might present themselves. In the meantime, as the recovery starts, airlines have also been put on notice that sustainability will be a key measure. That pressure will only increase as the screws are turned and the externalities of carbon are made more explicit. In other words, for the ANSPs they will be under pressure to prioritise flight efficiency overcapacity.